Oil prices drop on US, Chinese demand concerns

11th July 2011, Comments 0 comments

World oil prices dropped on Monday following disappointing data from the United States and China, the world's biggest energy consumers, analysts said.

New York's main contract, light sweet crude for delivery in August, fell $1.12 to $95.08 a barrel.

Brent North Sea crude for August delivery slid $1.19 to $117.14.

Crude prices were still reeling from an unexpectedly poor batch of US jobs figures on Friday, said Ker Chung Yang, commodity analyst for Phillip Futures in Singapore.

Data released by the US Labor Department showed the economy created just 18,000 jobs in June, far worse than expected and not even enough to keep up with population growth.

That pushed the unemployment rate up to 9.2 percent, and signalled growth in the world's largest oil consumer remained almost stagnant during the second quarter after a poor first quarter.

Rocketing inflation rates in China, which announced on Saturday that its consumer price index hit a three-year high 6.4 percent last month, also worried traders, Ker said.

"This will prompt some guessing that China will crack down on inflation again," he stated.

China has raised interest rates five times since October to rein in inflation, but some analysts are concerned Beijing may go too far and trigger a sharp slowdown in the world's biggest energy consumer.

© 2011 AFP

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